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Professionally Speaking May 2017 – Verve

The DOL Fiduciary Rule: Protecting Consumers with More Accountability

by Larry Mroczkowski of  Verve Wealth Management

You have likely noticed the recent news coverage around a regulation called the Department of Labor (DOL) Fiduciary Rule. Here’s what you need to know and how it might affect you.

Expanding the definition of fiduciary.

In short, the DOL’s definition of an “investment advice fiduciary” will expand to include brokers and insurance agents. Acting as a fiduciary means putting clients’ interests first, and the rule makes it easier for clients to know whether these individuals are making recommendations with their long-term best interest in mind.

If you’re not sure if your advisor is a fiduciary on your account, ask them to show you in writing. Depending on how your advisor is paid, the new rule may require that they provide increased transparency about what’s at stake for them or how much they will make by recommending a product or service.

DOL Rule encourages more transparency from commission-based advisors.

Commission-based fees create an incentive for advisors to sell certain investments regardless of whether they are in the long-term best interest of the investor. To help protect investors, the DOL Rule will require advisors to disclose up front what they’ll make off the commission-based sale.

Few changes expected for fee-based advisors.

The fee-based method pays advisors an hourly rate, flat fee or a percentage based on your portfolio assets, creating an incentive for advisors to grow their clients’ wealth in the long run. Because of this, the DOL Rule will likely present fewer changes for fee-based advisors.

The DOL Rule is scheduled to come into effect in June 2017. With or without new regulations, however, it’s important to have a clear understanding of your advisor’s fiduciary status and payment structure, and starting up this conversation now will help ensure transparency when it comes to your investments.

Larry Mroczkowski is a wealth advisor at Verve and has more than 15 years of experience in the securities industry. Readers can email him at

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Securities and Advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC. Insurance Products offered through LPL Financial or its licensed affiliates. Verve, a Credit Union, and Verve Wealth Management are not registered broker/dealers and are not affiliated with LPL Financial.